Kura Sushi USA, Inc. (NASDAQ:KRUS) Q2 2023 Earnings Call Transcript

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Todd Brooks: That’s great. Thanks. And then my second question, I’ll jump back into queue after this. Five units opened in the first half of the fiscal year. Sounds like the pipeline between under construction and executed lease is very strong. What I’m wondering is with one unit opening in Q3, are there any operational pinch points in Q4 to how many units you can open? I’m just trying to think with €“ I think you guys highlighted that were mostly new centers, which is an easier construction process in the back half of the year. What drives us for where we land between the nine units and the 11 units for full-year guidance? Thanks.

Jimmy Uba:

Benjamin Porten: So certainly the goal is to open those remaining units in Q4 evenly as possible to distribute the on the opening teams and the operational teams. But one thing that we’re happy about is that some of these openings are in existing units like California where we can really draw on the support of our existing units there, and so hopefully not have to leverage one of our opening teams. And so we’re doing €“ we’re trying to get as much €“ in front of the ball as much as we can. And so it’s not a manpower issue, that’s a bottleneck for us in terms of achieving the higher end of that unit guidance.

Jimmy Uba:

Benjamin Porten: Just to sort of repeat what Jeff had said in the prepared remarks, we’re very confident about those nine to 11 units and we’re extremely happy that we’ve got such a meaningful head start on fiscal 2024.

Todd Brooks: That’s great. Thank you all.

Jimmy Uba: Thanks, Todd.

Operator: Our next question comes from the line of Joshua Long with Stephens. Please proceed with your question.

Joshua Long: Great. Thank you for taking the question. I was curious if we could run through a couple housekeeping items. The 17.4% comp during the quarter. Could we talk about how that progressed through the quarter? I know, thinking back to January, you had talked about some strong 14% area comps of December, and then also there was a bit of incremental price taken from 1Q into 2Q. So just curious if you could kind of outline how that slowed through the quarter and then talk about any sort of acceleration in momentum that you saw in January and February?

Jimmy Uba:

Benjamin Porten: In terms of the difference between Q1 to Q2, the biggest single factor would be the impact of the easier comparison in Omicron. That’s probably going to be responsible for low-to-mid single digits of that comp. Besides that, we’re very pleased with the performance of the targeted marketing we began in December and we €“ as well as the brand collaboration that we did through our partnership with My Hero Academia. As a reminder, we lapsed 2% pricing in March. And so don’t think of the March results as a deceleration by any means, it’s really €“ when you back out the Omicron impact and that pricing lapse, it’s completely in line with the Q2 results. And so we’re very pleased with the results for the quarter-to-date as well.

Joshua Long: Great. That’s helpful. And then maybe just kind of level setting that pricing conversation, I feel like you had taken €“ I think it turned out to be an incremental 700 basis points from 1Q into 2Q. I think you had taken that in late December, so maybe you didn’t get a full 700 basis points for December, but is that where you shook up for the quarter? And then as you think about rolling into March to your point, Ben, you roll off about 200 basis points, so that kind of has about 13% menu price embedded in what we should be expecting for the 3Q period?

Benjamin Porten: Yes.

Jimmy Uba:

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